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The Federal Reserve announced Thursday that work began this month on a new study to measure fraud and associated costs to the U.S. payments system as well as identify fraud’s causes and contributing factors.
After a competitive bidding process, the central bank hired Boston-based The Boston Consulting Group to do the study, which it expects will take four to six months. The Fed said it expects the results “will help inform its ongoing collaboration with the industry to enhance end-to-end payment security.”
“The vast number of participants and complex nature of the payments industry make it challenging to determine where the greatest opportunities exist for significantly mitigating fraud,” Ken Montgomery, the Federal Reserve’s new payments security strategy leader and chief operating officer of the Federal Reserve Bank of Boston, said in a news release. “We hope to bring greater in
sight to the challenge with a comprehensive view of payment fraud data and payment security vulnerabilities that will help inform next steps for ongoing industry collaboration.”
The study is part of the Fed’s ongoing effort to improve payment security, as outlined in its “Federal Reserve Next Steps in the Payment Improvement Journey” report released last September.
The Fed recently disbanded its Secure Payments Task Force, a 200-member group formed in 2015 as part of its wider Payment System Improvement project. That project’s main effort was to generate proposals for real-time or near-real-time payments in the U.S. But the Fed says security will remain a high priority, and that it will be setting up industry work groups to address security issues.
